"In one action, Tempur-Pedic gains access to new slots at major retailers and independents with a complimentary product suite," wrote Brian Sozzi, chief equities analyst at NBG Productions in a note to clients. "Essentially, the company has fought to build a wall around itself from competitors that have demonstrated innovation." Sozzi estimated that annual revenue combined for the two companies is around $2.8 billion to $3.1 billion for 2012, making the combination the world's largest bedding company.
Stockholders with about 51 percent of Sealy's outstanding shares have put forth a written consent approving the deal. No additional shareholder approvals are needed to complete the acquisition.
Both companies' boards have approved the buyout, which is expected to close during 2013's first half.
Annual cost savings for the combined company are expected to be more than $40 million by the third year.
The announcement came as Sealy reported a loss of $106,000, and broke even on a per share basis for the third quarter ended Aug. 26. That compares with a profit of $6.6 million, or 7 cents per share in the year-ago period.
Revenue rose 9 percent to $365.4 million in the quarter.
Analysts had expected profit of 3 cents per share, on revenue of $344.2 million, according to FactSet.
In July, Tempur-Pedic International reported that its second-quarter profit fell 45 percent, but it managed to beat market expectations.
It blamed the profit decline on increasing promotions and discounts to keep up with the market. Tempur-Pedic made up for the soft North American market, where revenue fell 8 percent, with strong sales in international markets, where revenue grew 8 percent. Its total revenue fell nearly 4 percent to $329.5 million.
Tempur-Pedic warned investors in June that weak sales in North America would hurt its performance for the period.